The Canadian dollar has shown little movement this week. Currently, USD/CAD is trading at 1.2831, down 0.03% on the day. On the release front, Canada releases CPI and Core Retail Sales. In the US, there are three key events – Final GDP, the Philly Manufacturing Index and unemployment claims. On Friday, Canada releases GDP, while the US will release Core Durable Goods, New Home Sales and UoM Consumer Sentiment.
Traders should be prepared for some movement from USD/CAD during Thursday’s North American session, with a host of key indicators on both sides of the border. Canada will release consumer inflation and spending data, while the US publishes Final GDP. The markets are predicting another banner quarter, as the estimate stands at 3.3%, which would be unchanged from the Preliminary GDP release. US economic growth has looked sharp in 2017, prompting the Federal Reserve to raise rates three times this year, most recently in December. Another rate increase is widely expected in January, and a combination of strong US expansion and an accelerated pace of rate hikes could boost the US dollar.
President Donald Trump and Republican lawmakers are celebrating, after scoring a major legislative victory. On Wednesday, the House of Representatives voted for to pass Trump’s tax reform bill, after it narrowly passed in the Senate, by a vote of 51-48. Trump is expected to sign the bill into law next week. The tax legislation marks the first major overhaul of the US tax code in 30 years, and reduces corporate taxes from 35% to 21%. After failing to overturn Obamacare, the Republicans finally scored a big win, and will now have to sell the tax plan to a skeptical public, with congressional elections slated for November 2018.
